Asia
Centre has been conducting a series of seminars and discussions to
review India’s Security environment in the Sub-continent. As a part of this of
Series, a seminar was held on
09 August 2008 from 10 A M to 1 P M on the topic “Developments in Nepal:
Impact on India” at the I A S Officers’
Institution,
# 1 Infantry Road
,
Bangalore
. The seminar was presided by Shri A P Venkateswaran, former Foreign
Secretary and chairman of Asia Centre.

The
presentations were followed by a lively discussion session. Nearly
45 Asia Centre members and invitees drawn from retired officers of
Indian Administrative Service, Foreign Service & Defense
Services, academics and scientists attended the seminar.

This report summarises the
essence of the presentations and the discussions that followed.

INTRODUCTION.

Lt.
Gen. (Retd.) Ravi Eipe, Director of
Asia Centre,

Lt.
Gen. (Retd.) Ravi Eipe
explained the context of Nepal-India relations since the last
seminar on the subject on
April 8, 2006
.
Nepal
is in transition, with the Maoist party yet to form a government
after its electoral victory in April 2008.This country has strategic implications for
India
as it is interposed between
China
and
India
and has open borders with
India
.Nepali Gurkhas, famed
for their valor and loyalty, still serve in the Indian Army, which
continues to recruit new soldiers from
Nepal
every year.Gurkha
ex-servicemen number 2.5 lakhs; and they draw Indian pensions.The leader of the
Nepal
’s Maoist party, Prachanda (original name, Pushpa Kamal Dahal),
has taken pains to convey the image of a moderate with a favorable
attitude towards
India
, though his earlier anti-Indian sentiments and close links to the
Naxalites are known.‘What
are the true colours of his movement?’ is a serious question for
us.He has also said in
interviews that he wants
Nepal
to maintain “equidistance” between
India
and
China
.Will he move closer
towards
China
?If so, what are the
consequences for
India
?

His paper, entitled the ‘Rise of Maoists
in
Nepal
: Implications for
India
’ has been uploaded on his website at http://www.southasiaanalysis.org/papers29/paper2802.html
.A gist follows:

Prime Minister Manmohan Singh reportedly
assured
Nepal
’s caretaker Prime Minister, Girija Prasad Koirala during the SAARC
summit conference in
Colombo
on
August 3, 2008
on continued Indian support for
Nepal
’s democratic transition.He
also commended the peace process and the elections to the Constituent
Assembly (
April 10, 2008
).Koirala’s presence at the
summit had raised a controversy.He
had to apologise for failing to consult the Communist Party of Nepal
(Maoist) (known as the CPN (M)), -- the largest single party in the
Constituent Assembly --- and the Communist Party of Nepal (United
Marxist-Leninist) (known as the CPN (UML)).The newly elected President, Ram Baran Yadav was a more appropriate
choice, they said.This
incident highlighted the persisting suspicion and distrust in inter-party
relations after the elections to the Constituent Assembly.The Maoists even suspected the Indian hand in a conspiracy to deny
them the fruits of office.

However, the main parties agreed on
August 5, 2008
to form a national unity government led by the Maoists.It is to include the Nepal Congress, the CPN (UML) and the Madhesi
Janadhikar Forum (MJF).The
last named party represents people of the Terai region bordering
India
.The Maoists are to head the
coalition, a decision reached after difficult negotiations.The government will remain in office at least until the new
constitution is approved by the Constituent Assembly.This may take two years.

The negotiations have been tough.Hence distrust will probably remain.There was an earlier controversy about the election of Ram Baran
Yadav, a Madhesi, as president, on
July 24, 2008
.He defeated the Maoist
candidate. The Maoists reacted by withdrawing from talks on government
formation.They had to be
cajoled to rejoin the talks.

The Interim Government had paved the way
for the elections to the Constituent Assembly and the historic declaration
of
Nepal
as a republic (
May 28, 2008
).The 240 year-old monarchy
was abruptly terminated.Earlier,
the government had given Madhesis more representation in local governance
in order to end the sixteen days of strikes and protests paralyising Terai
and blocking food and fuel supplies to
Kathmandu
.Terai is the country’s
agricultural heartland, with almost half the population of
Nepal
, producing 80 percent of its economic output.It is also the main transport link to
India
, which is
Nepal
’s biggest trading partner.

The Maoist leader, Pushpa Kamal Dahal,
known as Prachanda, is set to lead the government of national unity for
the next two years.His party,
CPN (Maoist) has 220 seats in the 601-member Constituent Assembly, double
the number of its nearest rival, the Nepal Congress.The Maoist party cadres are highly-motivated and trained, capable
of prevailing in political negotiations through muscle power if not voting
power.It accords priority to
the integration of the suitable men from its militia into the Nepal Army.This would give the army an ideological edge in order to make it an
instrument to capture state power for the Maoist party.
India
must be concerned about this possibility.

In the new government, the Maoists will be
dominate as shapers of state
policy, but they will not yet have total control of it, which will be
their ultimate objective.The
Maoists have used a mix of Chinese and Soviet tactics to reach this stage.They mobilised the peasantry in rural areas and resorted to street
agitations in
Kathmandu
and the Terai region.If
Nepal
establishes its version of a proletarian dictatorship, it would cross
Indian interests.Can
India
do anything by itself or with other countries to prevent such a scenario?

Prachanda has reassured
India
that his policy would be guided by political equidistance between
India
and
China
, but not economic equi-dependence.He
avers that
Nepal
’s economic links with
India
are too strong to be diluted by seeking close relations with
China
.He has spoken of favouring
closer ties with New Delhi on the basis of new relations, which take due
account of the special features of geographical, historical and cultural
proximity.(Karan Thapar’s
interview, CNN-IBN,
May 20, 2008
).

But Prachanda is determined to raise two
issues relating to
India
: the 1950 Treaty between
India
and
Nepal
and the entire set of bilateral agreements.Convinced that the 1950 Treaty is unequal, he wants its terms
amended.But he is evasive on
the question of the future of the open border between the two countries
and the right of Nepalese to live in
India
as citizens.He is keen to
revise the provision on
Nepal
having to consult
India
before acquiring arms from other countries.He has avoided comment on a charge that
Nepal
’s lack of economic development is due to its open border with
India
.

Prachanda also wants to review the
recruitment of Gurkhas to the Indian army and other armies.He wants this subject debated in the Constituent Assembly, taking
account of the historical background.But he is aware that an immediate stop to such recruitment would
damage employment prospects for young men in
Nepal
.

Nepal-India economic relations hinge on
trade, aid and investment, with
India
as the dominant partner.
Nepal
’s exports to
India
constitute about 55 percent of its total exports.
Nepal
’s imports from
India
amount to about 44 percent of the total imports.Joint ventures number more than 265, the working firms running to
about 100.Indian investment
in
Nepal
amounts to 30-40 percent of the total Foreign Direct Investment.Indian investment, the value of which runs to several billion
rupees, is spread in diverse sectors: tourism, infrastructure, consumer
goods, garments and carpets.Indian
companies like Hindustan Lever and Colgate have set up manufacturing
plants in
Nepal
, exporting their products to
India
.Infrastructure projects
cover roads, bridges, hospitals and airports.
India
has built about 80 percent of the east-west highway in
Nepal
, apart from contributing to other road building, from
Kathmandu
to other towns.
India
has also helped in building many bridges across rivers.

Nepal-China trade amounts to ten percent of
the total trade.Chinese
investment projects are also much smaller in number compared to Indian
ones.They are in hotels and
restaurants, electronics, radio paging, garments, nursing homes,
irrigation, hydel-power and civil works.
China
is also aiding
Nepal
in road building, but the total length of such roads is much smaller than
that of roads built by
India
.

China and
Nepal
signed a Memorandum of Understanding in 2001 on cooperation in tourism.This was followed by an Air Services Agreement, with Air
China
opening a link in 2004 from
Chengdu
to
Kathmandu
.Since 2007, another link has
been started between
Guangzhou
and
Kathmandu
.Nepal Airline has air
services, Kathmandu-Shanghai and Kathmandu-Hong Kong.

Sino-Nepal military cooperation has grown
since 1998.The Nepal Army has
been sending its men to Chinese military institutions for training and
study.The scheme includes
adventure training with Chinese officers participating.

Nepal-China relations have expanded, but
they are not as multi-faceted as Nepal-India relations.The latter are more useful and important to
Nepal
, which has benefited greatly from its privileged economic relationship
with
India
.If Maoist-led
Nepal
seeks equidistance in economic relations as between
China
and
India
, it would be counter-productive for the country.Prachanda may understand this, but not many others in his party.Bhattarai (the deputy leader), for instance, has blamed the open
border with
India
for
Nepal
’s backwardness.It is still
unclear if Prachanda sincerely esteems good relations between
Nepal
and
India
.Pro-China intellectuals
among the Nepalese openly express their dislike of
India
.Chinese spokesmen emphasise
that Sino-Nepal relations are based on trust, equality and sincerity,
insinuating that
India
does not treat
Nepal
as an equal partner.

The Chinese Ambassador to
Nepal
, Zheng Xianglin, said (
August 5, 2008
):“
Nepal
is situated in a favorable geographical position in
South Asia
and is a passage linking
China
and
South Asia
.”This remark highlights
China
’s interest in strengthening its presence in the subcontinent through
Nepal
.It indicates
China
’s ‘Look South’ policy, like
India
’s ‘Look East’ policy.
China
already has a strategic presence in
Pakistan
,
Sri Lanka
and
Bangladesh
.With the Maoist party in
power in
Nepal
,
China
will try to repeat this there.
China
has acquired the status of an observer in SAARC.Some members of the group would like
China
to come in as a member to counter-balance
India
.
Nepal
may be one of them under the new regime.

China
has opened up road links from
Tibet
to
Nepal
and is extending the railway line from
Lhasa
to
Kathmandu
.These links will add to
India
’s security threats from the north.
China
is also hoping that under the Maoist party
Nepal
will be able to check the anti-China activities of the Tibetan refugees
who have been agitating against Han colonisation of their homeland.This small community is used by the US Radio Free Asia for
broadcasts beamed to Tibetan listeners.
China
wants to pre-empt
India
and the
US
from trying to destabilise its dominance in
Tibet
if there is unrest following the Dalai Lama’s demise.

India is obliged to compete with
China
for political influence and economic benefits in
Nepal
, as it is in
Myanmar
too.
India
has lost its strategic monopoly in
Nepal
with
China
’s growing influence there.In
Myanmar
too the military government tends to choose Chinese interests before
Indian interests, if a choice becomes necessary.
Myanmar
’s ruling junta is both fearful of
China
and grateful to it for its support in the UN Security Council and
elsewhere.If the Maoist
regime in
Nepal
has to choose between the two neighbours, it may opt for the Chinese, not
so much out of fear, but more out of ideological affinity.

Nepal’s relations with
Pakistan
have not been of major concern to
India
, but may become so if
Pakistan
uses
Nepal
with impunity through agents and the ISI to harm Indian interests.About two decades ago, Khalistan organisations based in
Pakistan
used to operate through
Nepal
.In the 1990s and later,
jihadi organisations have also done so.Mafia groups like Dawood Ibrahim’s, based in
Pakistan
, use Muslims in the Terai region for disruptive strikes against
India
.Some suspects from the
Mumbai blasts of March 1993 escaped to
Karachi
via
Kathmandu
.Black money from
India
is laundered in or via
Kathmandu
, which is also the node for pumping in fake currency notes by the ISI
into
India
.There was a case of timely
action by
India
which scotched the funding of a TV cable network in
Nepal
by Dawood Ibrahim.
Nepal
’s cooperation with
India
to frustrate such activities is important.

The police in
India
and
Nepal
had earlier cultivated mutual understanding and cooperation.
Nepal
’s police officers used to come to
India
for training.Under the Maoist
regime, these contacts may lose much of their old informality.

On Nepal-US relations, which are still in
the formative stage, Prachanda has not revealed his hand, but the US
Embassy in
Kathmandu
has reportedly established contact with the Maoist party. The
US
priority will be to discourage the Maoists from moving closer to
China
.Such a policy by the
US
would suit
India
’s interests too.For the
Maoists, one priority would be to get the
US
remove CPN (M) from its list of terrorist organisations.This is feasible under US rules and regulations.

The Maoist party’s decision to give up
armed struggle and join the democratic mainstream may not have a great
impact on the Maoist movement running down central
India
.The Nepal Maoists depended
on their Indian counterparts in material and ideological terms rather than
the other way round.The
Indian Maoists have complimented the Nepalese counterparts for winning the
elections, but also expressed skepticism about the latter’s democratic
debut.

The
Nepal
elections were generally seen to have been free and fair.The Maoists did well in the elections since the people preferred
them to the other parties which had been discredited.
India
has no option but to work with the new regime so long as its policies do
not turn anti-Indian.If such
adverse policies are adopted,
India
should have the courage and confidence to correct the situation with the
help of its well-wishers in
Nepal
.There is still a reservoir
of good will for
India
among the Nepalese.The
well-wishers should be nurtured and encouraged to be active, not in order
to undermine the Maoists, but to prevent anti-Indian distortions.

Four months after the historic elections in
Nepal
(
April 10, 2008
) the new government had not been formed.Longer delay would squander the unique opportunity of ending the
country’s continuing socio-economic-political crisis.Even if a new government is formed, the prospects do not look bright
for smooth governance, the peace process and Constitution-making within two
years.

The likely scenario may well be a façade
of democracy and collapsing governance, a breakdown of law and order, with
serious implications for
India
’s security. On the Indian side of the border, administrative
deficiencies complicate the situation further.
India
is in no position to denounce political infighting in
Nepal
.But
India
has to be proactive, not only to safeguard its own security concerns, but
also to mitigate the human cost to
Nepal
from instability and disorder.

Positive elements:

·The holding of the April 10
election was undoubtedly an achievement in itself.It opened up the possibility of a new, inclusive, democratic
Nepal
.

·The Maoists have come into the
mainstream.It is a unique
example of an extreme left insurgency which has turned to democratic means.It is unlikely that the Maoists will take to the jungle again. They
are now locked into the democratic process.

·The April 10 election, though
flawed, was credible enough and relatively free of violence, belying many
fears to the contrary.

·The transition to the Republic
has been peaceful, with Gyanendra refraining from resisting the popular
call for an end to the monarchy.

·The election result is
certainly a mandate for change:

§The Maoists have won emphatic victory, although short of a
parliamentary majority.

§Madhesis have become a new power centre, with their men in the 4th,
5th and 6th places in the new Constituent Assembly.

§Most of the old leaders from mainstream parties, including the
Koirala family, have been rejected.

§The Maoists are showing flexibility on several issues in response to
demands by other parties.

Negative elements

§Four months after election,
the government was not yet formed.

§The election results tend to
paralyse government and the process of constitution-making.

§The Maoists won 220 of the 575
seats, more than combined total of the NC and the UML (213), but the
Maoists are at the mercy of other parties in the sense that if the latter
act as spoilers (which they clearly wish to do) they can block decisions.

§Political leaders tend to
bypass the CA, indulging in horse-trading out of personal ambition or party
interest.

§Overall, a culture of impunity
and violence prevails. The much touted “New Nepal” is currently a
republic of uncertainty, and may well become republic of fear.

Other deficits:

Mistrust among the political leaders and parties; political
opportunism, shifting alliances, absence of leaders with vision and
stature.

The election of the President, the Vice
President and the Speaker came about after prolonged bargaining and
horse-trading.This does not
inspire confidence, as both the President (a NC-Madhesi candidate) and the
Vice President (an official candidate of the Madhesi parties) lack
credibility. The election result was due to the determined bid by the other
parties to keep the Maoists out.

The core issue of security management was
left unaddressed. The Army is unwilling to accept both the integration of
Maoist cadres and the “democratisation” move for the intake of Madhesis.
The higher political profile of the Army Chief, encouraged by G.P. Koirala,
not a good sign.

The main concern is not so much the
integration of Maoist guerillas as the proposal for compulsory military
training and periodic refresher courses for every Nepali adult.

Basic Question:
“Can Maoists change their DNA?”

The
jury is still out. Many of their actions and statements do not inspire
confidence that they have decisively given up violence and intimidation.

On present evidence, it seems that they may
have changed their strategy and tactics, but not their ideological goals.

The Maoists themselves emphasise that their
success is due to the “fusion of ballot and bullet”, and insist that
they have not abandoned armed struggle.

They do not regret their past violence;
they rationalise their present violence. The activities of the Youth
Communist League clearly indicate that the Maoist want to retain their
parallel police to enforce their will.

The Maoists’ dilemma: their desire to
lead the government and occupy key posts, although aware that parliamentary
arithmetic will not enable them to deliver on promises. Hence
their frequent threats to stay out of the government unless their terms are
accepted.

Recourse to non-democratic methods must be
corrected, perhaps in concert with other countries.

The Maoists are the only party with a clear
agenda, motivation, strategic thinking, organizational strength, discipline
and leadership.They will probably adopt all means to ensure their sweeping
victory in the next election two years hence.

Internal divisions in the Maoist party
notwithstanding, there is no serious threat to its party discipline and
unity.

Regarding
India
, the Maoists have generally moderated their rhetoric; they have regular
contacts with Indian leadership and realise that they need
India
in order to remain in power.However,
they openly assert eagerness to strengthen ties with
China
. Maoist leader Mahara went to
China
, Prachanda has often expressed keenness to visit
China
, and the Maoist appeasement of
China
on
Tibet
, are early indications of a definite Maoist tilt towards
China
.

Maoist demands, such as the revision of
Nepal-India Treaty of 1950, ending Gurkha recruitment to the Indian Army,
renegotiating agreements
on water resources, and regulating open border, should be taken seriously,
even if the Maoists do not press them for some time due to their
preoccupations with consolidating political power.

The Maoists will not directly provoke
India
, but will find ways to assert their nationalism, even using former palace
loyalists, with whom they have a natural convergence, especially on
equidistance between
India
and
China
.

Their success will embolden Indian
Naxalites to emulate their example: to use violence until the state is
discredited and abdicates its responsibilities, then give the impression of
joining mainstream competitive politics, but continue to promote their
ideological through a combination of democratic and undemocratic means.

The
Nepali Congress and the UML are demoralised and directionless. Both lack
inner party democracy (especially the NC) and suffer from serious inter-party divisions.Koirala’s age and failing health should be matter of concern for the NC’s future. He
was evidently keen on continuing as Prime Minister, falsely implying
that he had
India
’s support. If the UML joins
the Maoists in the new government excluding others, the NC may be able to revive
itself in
partnership with the Madhesis.

The
Madhesi Phenomenon

The MJF, the TMDP (widely believed to be
supported by India) and two
factions of the Sadbhavana Party have emerged as important power centres,
but they tend to overplay their hand, creating a backlash (e.g. their
demand for a Madhesi state, their winning the posts of both the President
and the Vice President, the Vice President taking the oath of office in
Hindi. One should not exaggerate the pro-India implications in Madhesi
posturing, though they can be an effective counterweight to the Maoists).

India

·There is general goodwill for
India
on account of its role in bringing the Maoists and political parties
together and in “mainstreaming” the former.

·However, there is
dissatisfaction in all parties because of unrealistic expectations that
India
will favour them.

·There is a general perception
that
India
has its own security-driven agenda.

·Indian moves on future
political crisis situations, the integration of the PLA in the Nepal Army
and in Madhesi issues will be closely watched;

·India should explore the possibility of reaching
some understanding with
China
so that either side is assured that its legitimate core concerns will be
respected by other.

·The “Special relationship”
as defined in the 1950 Treaty is already dead; and mega-hydel projects are
most unlikely to take off because of increasingly nationalistic posturing
by the Maoists.

·India should avoid being overly engaged on Terai
issues or with Madhesi groups.This
would be counterproductive. The real problem for
India
could be, not so much the Maoist-led government as the prospect of
instability and breakdown of law and order and the unraveling of
Nepal
in case the Maoists keep out of government.

·India’s present posture is a mix of
laissez-faire and the concept of ‘responsibility to protect’.
India
has in the past experimented with a Nehruvian mix of calibrated democracy
and British-India neo-colonialism, the Gujral doctrine; the BJP’s mix of
hegemonism and Hindutva, as the base for a special relationship.

·The principle of
‘responsibility to protect’, if invoked with sensitivity and concern
for well-being of
Nepal
rather than support for a particular leader or party, may not be
controversial.It may even be
welcomed by the Nepalese, who desperately want peace and are disillusioned
with the Maoists as well as main political parties. (Example:
India
’s success in bringing the Maoists and political parties together against
the absolute rule of Gyanendra).

·India’s priorities should
be: effective management of Nepal’s sensitivity as a small, landlocked
country; economic inter-dependence; and integration, especially through
sub-regional projects involving Nepal’s Terai and the adjacent Indian
States; avoiding visible dependence on the power centre of the day but
dealing transparently with Nepal as a nation, so that there is a strong
popular support for Indian policies; anticipating and defusing
misunderstandings before they became irritants; adopting a low profile
diplomacy which gives sense of security to all political actors, especially
in the present unstable situation.

He
recalled his numerous and extensive visits to
Nepal
, his experience in recruiting Gurkhas and with ex-servicemen drawing
pensions for their service with the Indian Army.

The questions arising for us from the
developments in
Nepal
are:

1) Can we trust the Maoists?We must wait to find out.

2) Can the old
Nepal
change to a new
Nepal
?

3) Will China and
Pakistan
gain increasing influence in
Nepal
?

India must be vigilant not to be caught on the
wrong foot.The peace process
has brought the Maoists to power.A
left-wing government in
Nepal
could be a stimulus to Indian Maoists.We should consider the Maoist rhetoric as a phase in the past.

The Nepalese are keen on building up their
country anew.It is a work in
progress, though they did have some starting trouble.

Nepal has a history of revolts and rebellions.So the Maoist upsurge is not completely new.While previously the country was ruled by an elite, a basic change
has taken place, with popular involvement and empowerment.

The people’s war by the Maoists has
achieved its main objective.The
election of the Constituent Assembly is a triumph for them.

Some Maoists even consider that their
struggle has ended prematurely with no storming of the palace.It is the first time an underground rebel group has come to power
through elections and become the main parliamentary party.It is also the first time the Madhesis and other ethnic groups have
secured significant positions.Outside
observers went wrong in predicting the results of the elections.

How to deal with the Maoist-led government?
is the question.It is not a
purely Maoist government.It
is worth noting that ten years of ‘people’s war’ could not achieve
what the 19-day ‘andolan’ (protest movement) did.The Madhesis have also taken to their own ‘andolan’.

There was an intelligence failure on our
side in not foreseeing the victory of the Maoist wave.The mood was changing: a claim that it was now their turn to rule.Even ex-servicemen in
Nepal
tended to support the Maoists.

Coercion played a part in the Maoist
tactics.They also appealed to
the ‘sons of the soil’ sentiment.They have been locked into the peace process by the people.

Madhesis have gained one-third of the
seats, though hitherto scorned as ‘dhotiwallahs’. Now
they have a power share.They
contribute 77 percent of the revenues of
Nepal
, but only 7 percent is spent on their region. The Maoists will not accept
special demands by the Madhesis.The
other parties, the MJF, the UML and the NC will find unity difficult to
achieve.

Now a national government is needed until
the constitution is framed.Will
it turn into a presidential rule?There
are various possible combinations for a coalition.An alliance of the leftist parties is one.There will be a generational change when the older politicians are
gone.

The Maoist aim is to go for elections in
two and a half years and get a two-thirds majority.The final objective is to transform
Nepal
into a one-party state, similar to the
West Bengal
model.(Prachanda has been
invited to Kolkata by the
West Bengal
government).

India’s main change of policy is giving up the
concept of relying on “the twin pillars” (the monarchy and the
democratic parties) and recognising the people’s choice.Both the Foreign Minister and the Congress high command have
accepted the Maoist victory.It
was not politic for the Indian government to say that it would have
preferred the Nepal Congress to be the main party in
Nepal
, but that it could work with the Maoist party.

The Indian government has sponsored a
conference on
Nepal
and
India
to take place in
Patna
in September.It is noteworthy
that Mrs. Bhattarai has spoken of a mandate by the people for a new
Indo-Nepal relationship.
Nepal
wants “equi-proximity” with
China
and
India
, not distance from either of the two neighbours.Prachanda, who had said in 2007 that
Nepal
looked to
China
for support, has observed in 2008. “
India
has changed; so we have changed.”This
denotes a pragmatic attitude. Without
India
,
Nepal
cannot prosper.(Prachanda’s
interview to the Hindu carries the same message of pragmatism).

The leftward direction in
Nepal
could radicalise the youth and increase the strength of the YCL.The Maoists have good contacts with the Left front government of
West Bengal
.The ideologues still believe
in armed struggle.There is an
active linkage with the Indian Maoists. Prachanda has held some
discussions with the Indian Maoist leader, Azad. Azad has, however,
attacked Prachanda for making compromises with the enemy.

China has different concerns, relating to
Tibet
’s future.The Chinese
backed the King and the monarchy, when they had combated the Maoists for
“anti-governmental activities”.
China
is now trying to regain its influence in
Nepal
.

The
US
too, after opposing the Maoist wave in
Nepal
in a sustained campaign, is now adopting a nuanced policy.It wants to check
China
gaining greater influence in
Nepal
.Richard Boucher (Deputy
Secretary in the US State Department) spoke of ‘convergence with
India
’ on some matters concerning
Nepal
, but also of ‘some divergence’.The
US
is highly antipathetic to the Nepal Maoists, but will watch the actions of
the Maoists to assess the trend.

India and
Nepal
have had close military level relations.
India
’s Defence and External Affairs Ministries have to coordinate the policy
direction for the future effectively.The ex-servicemen lobby could be engaged to suit Indian interests.There is a residual threat in that Maoist cadres have not given up
their arms fully.The Maoist
guerrillas cannot all be absorbed in the Nepal Army.What happens to the militants left out, especially those with arms,
is a matter of concern.

The Madhesis are a potential tinderbox.Pahadis who come to the plains and settle in the plains could cause
friction.The Madhesis
proximity to UP and
Bihar
is a worry, if armed gangs which include criminal elements infiltrate into
India
.With some 12 million
Nepalese living in
India
, we have to exercise constant vigil to ensure that there is no
disturbance of law and order from them.

He is currently Director (North), Ministry
of External Affairs; He previously served in the Indian Embassy,
Kathmandu
and later was the Consul General in Birganj in
Nepal
, from 2001 to 2007.A gist of
his talk is given below.

The elections to the Constituent Assembly
have changed
Nepal
’s politics irrevocably.The
results were mainly determined by the youth of
Nepal
and the mrginalised groups, including Janjatis, Madhesis, Dalits and women
voters.They voted for
political change.This verdict
by a more inclusive and plural society replaced the hill-centric
nationalism.

The Maoists emerged as the single largest
party, securing 29% of the votes and 38% of the seats (226).But they do not have a simple majority in the house.The political parties of
Nepal
deserve to be commended on the elections.

During the peace process, Indian policy was
to engage with all the key political actors.
India
’s stand was that it was for the people to decide who should govern them
and how.
India
is proud to have played a part in this historic transformation.

One big gain is that the Madhes now has a
voice in the Constituent Assembly which cannot be ignored.The Madhesis have one third of the seats.They form a new force in politics.

It is not clear how the new Nepalese
identity would be defined.It
could be based on a narrow cultural and linguistic aspect or a broader
sociological spread. The
people’s mandate and the trend of successive amendments to the
constitution have made Nepalese politics and institutions more inclusive.

Forming the Government.

After the post-election euphoria, the
election of the president and vice-president signified a big setback to
the Maoists.It shows the
increasing polarisation of politics and the fragility of the peace process
in
Nepal
.

The fractured mandate of the Assembly
should enjoin all the parties to cooperate and form a government of
national unity.A government
based on a single party or an alliance would be short-lived and unstable.The CPN-M as the largest party has earned the right to lead the
government.

Hitherto the ruling elite in
Kathmandu
had whipped up an anti-Indian psychosis to bolster patriotic sentiments.Governments were formed and changed frequently:there were 16 governments in the 18 years between 1990 and 2006.

Issues before the Government.

The big issue relates to the disposition of
the 19,000 armed Maoist combatants now quartered in camps.The Maoists want them integrated with the Nepal Army, which, for
its part, is wary of its integrity being impaired thereby.The other parties are also wary of it.

Regarding the Indo-Nepal Treaty, the new
leadership in
Nepal
must clarify whether it wants to revise the treaty fully or only to amend
it.
India
and
Nepal
held talks at the level of Foreign Secretaries in February 2001 on
reviewing the treaty.We
remain willing to discuss the issue.We
see no great difficulty in arriving at a mutually agreed revised text.

The Maoists have spoken of ‘regulating’
Nepal
’s open border with
India
.We too want some regulation,
but no restriction of movement, given the close kinship ties between
people on either side of the border.

Gurkha recruitment to the Indian Army has
been opposed by the Maoists.The
new government has to decide its policy on this issue.If recruitment is stopped, the youth in
Nepal
will be left without an attractive avenue of employment.It is noteworthy that pension payments from the Indian Army help
several million households in
Nepal
.

The new
Nepal
is a diverse
Nepal
.It answers to a more
inclusive and egalitarian political structure with more ethnic identities
and cultural differences.The
‘Jan andolan’, particularly with respect to the Madhesi and other
ethnic groups in the Terai, has helped this broadening.

Indo-Nepal relations:

Geographical necessity and intense
people-to-people relations ensure that the two countries simply cannot
look away from each other.

70 percent of
Nepal
’s foreign trade is with
India
.40 percent of its FDI is
from
India
.So are 40 percent of its
foreign tourists, 100 percent of its fossil fuels and 16 percent of its
dry season power.The
Nepal
rupee is pegged to the Indian rupee.This,
with more trade integration, has given greater monetary stability to
Nepal
than many less developed countries in conflict situations enjoy.
India
’s economic aid to
Nepal
is, in money terms, value and spread, easily the highest.

There are high stakes in hydropower,
irrigation and flood control.Cooperation
in these areas could transform not only
Nepal
, but also states like
Bihar
, UP, Uttarkhand and
West Bengal
.It would also enhance
bilateral relations.

After nearly five decades of politicised
mutual suspicion and distrust, a beginning has been made in this area of
cooperation (
Upper Karnali
, Arun III, and
West Seti
).Nepalese are realising the
value of cooperation with
India
for economic benefit.

We must make concerted efforts to engage
the Nepalese living in
India
, who number around 9 million.They
could help to neutralise the anti-India campaign which was used as a
strategic tool by the
Kathmandu
ruling elite until now.

Since
Nepal
is a much smaller country,
India
needs to be the more generous partner, with more sensitivity for the
concerns and compulsions of the former.

There is a tremendous untapped potential
for a mutually rewarding partnership between the two countries.It is for
Nepal
to decide the pace and the terms of such a bilateral relationship.

The transition to a stable, democratic,
inclusive and peaceful polity in
Nepal
would answer to the aspirations of its people and also serve our long-term
interest.

Discussion

The discussion began with three questions.1) Whether there are Maoists among the recruited Gurkhas for our
army?2) What would have
happened if the king had not agreed to go in the face of the general
demand for the end of the monarchy?3)
Have the Maoists lost some relevance after their victory without a
revolution?

Maj. Gen. Mehta said that the first turning point of the transition was the
palace massacre, which brought Gyanendra to the throne. One
of the possible scenarios at that time was to retain the monarchy, but in
a ceremonial form in the parliamentary system. He explained the different
categories of Gurkhas who were drawing pensions. Some of them were
sympathetic to the Maoists.

Shri Rajan
said that there is a convergence between the far left and the far right in
that both are nationalistic, pro-change and unfavorable to parliamentary
democracy.The loyalists
pressed King Birendra to consolidate powers within the palace elite.

To another question relating to
Prachanda’s interview to the Hindu, Shri Rajan replied that the Maoists
had a clear vision of socio-economic progress.They want science education to be improved and
Nepal
modernised.They had also
brought benefits to the poor and thereby reaped the reward of gaining more
credibility.

Maj. Gen. Mehta added that the Nepal Congress and the UML were overconfident
about the elections.The
Maoists controlled some 80 percent of the country and ran a parallel
government there. Local commissars under their control got the PLA cadres
to do social work in the villages, thereby securing votes for the Maoist
party.

Shri Gururaj
Rao said, in regard to Prachanda’s keenness to develop
Nepal
’s science and technology, that cooperation between the two countries
can indeed be intensified. There is already a memorandum of understanding
to develop cooperation in agriculture, meteorological research, etc., and
to set up science learning centers for training students.He knew from his tours that
Nepal
’s colleges could boast of some brilliant students.
Nepal
just lacked the facilities.Herbal
extraction and classification could be a promising line. This kind of
research work could be commercialised for
Nepal
’s benefit.

Shri Rajan
took a question on
China
’s competition with
India
in extending its influence in
Nepal
, and another on the Nepalese elite in
Kathmandu
being anti-Indian.He said
that
India
should not be seen as being aligned with the
US
on
Nepal
’s political evolution.As
regards
China
, he said that
India
and
China
could have a serious dialogue on policy, so that neither need encroach on
the other’s interests.
China
may not go along with
Nepal
playing the ‘Chinese card’.
India
could expand its investments in
Nepal
and also liberalise imports from
Nepal
.The Indo-Sri Lanka free
trade agreement offers a precedent for it. The Nepalese complain of
non-tariff barriers by
India
.They resent transport of
containers with merchandise being stuck at the border posts with some
perishables rotting away.He
considered that
India
has the advantage over
China
in developing cooperation with
Nepal
which involved the people.

Shri G.
Rao recalled that
Nepal
played the
China
card repeatedly during the reign of King Mahendra.There was active promotion of anti-India materials by certain
groups.But outside
Kathmandu
the people had and still have tremendous goodwill for
India
, which is close to their hearts.He
added that
Pakistan
’s ISI, disliking the popularity of
India
, indulged in subversive activities like circulating fake Indian currency.Under the Maoist regime, relations with
India
could improve if conditions are favourable to bilateral cordiality.

Shri B.
Raman said that
China
acts with a long-term strategic thinking.It fears disruption in
Tibet
through uprisings encouraged from outside.It is waiting for the passing of the Dalai Lama to foist its
nominee as the successor.

A member intervened to
say that
Nepal
as a mainly Hindu country was unlikely to accept the Chinese way and would
lean more towards
India
.

Shri Eric
Gonsalves suggested that
India
could help
Nepal
to run medical colleges like the one in Pokhran.

Shri A.M.
Khaleeli forecast problems for the Maoists in governing the country.
He added that
India
should not interfere or take part in American activities in
Nepal
.Another issue he raised was
regarding dams on rivers in
Nepal
flowing into
India
for generating electric power and for flood control, which would benefit
both
Nepal
and
India
.

Shri Rajan
answered a question whether the Nepalese favoured the movement
demanding Gorkhaland in the north of
West Bengal
state.He said there was some
sneaking sympathy for the India-based Gurkhas among the Nepalese, but that
the Maoists have not indicated their support for the demand.

Maj. Gen. Mehta
added that Subhash Gheising was a respected figure and that a movement
for ‘Greater Nepal’ could pose a danger for us, with the large
Nepalese diaspora in
India
being drawn in.

On Gurkha recruits,
Shri Rajan explained that they
had openings in the
Nepal
police, the Nepal Army and in the Indian army.Maj. Gen. Mehta,
appreciating a point made by a lady member that the Indian soldiers should
be given due facilities and equipment to take on possible encroachment by
the Chinese, said that
India
should not get deluded by Chinese or Nepalese talk of goodwill.Whoever rules
Nepal
is aware that it is sandwiched between two great powers.
Nepal
does not want to be crushed between them.It will rope in
Pakistan
and
China
to keep
India
in check.
Nepal
is ‘India-locked’ and over-dependent on
India
.This factor needs to be
borne in mind.
China
will surely compete with
India
to advance its interests in
Nepal
.There are 19 China Study
Centres in
Nepal

Conclusion

Asia Centre’s previous
seminar on
Nepal
was held on
April 8, 2006
.In the two years since then,
Nepal
has taken a hopeful turn, exceeding the expectations of many observers.Soon after Asia Centre’s recent seminar of August 9, 2008, the
tortuous Nepalese peace process has at last yielded encouraging results:
the Constituent Assembly is set to take up its task of drafting a new
constitution based on Nepal’s current political realities; a coalition
government has been formed, with the CPN (M) in the lead and Prachanda
sworn in as the new Prime Minister (August 18. 2008).It is a magnificent transformation brought about by the people of
Nepal
, who began to shape their political future with the Jan Andolan in 1990
and a second Jan Andolan in 2006.They
have created a republic liberated from monarchical autocracy with its
arbitrary whims and palace intrigues.

The prospects of the republic
are still unclear: the hopeful trend could continue, if the political
parties act responsibly to ensure a stable nation intent on building up
the prosperity of its people.In
this they can count on the ready assistance of friendly foreign partners,
with
India
leading.On the contrary, if
there is a reversion to the old habits of inter-party and intra-party
conflict and politicking, it could undo and nullify
Nepal
’s democratic achievement.

Nepal is too close and intimate a neighbour for
India
to neglect or ignore.Instability
in
Nepal
will inevitably undermine the stability of the adjacent Indian states.
Nepal
’s security is bound up with
India
’s in a strategic sense as well.As
a small country lying between
China
and
India
,
Nepal
is for us the barometer of Chinese pressure.

All the four seminar speakers
took the
China
factor as the major premise of their presentations.
India
has come through a perilous period of political turbulence and the Maoist
struggle for power in
Nepal
.It could have deflected our
own trajectory of growth.
India
’s sterling contribution was to coax the seven Nepalese political
parties to reach a consensual agreement with the Maoist party, so that the
latter could emerge above ground as a respectable political force backed
by the voters.No doubt this
outcome has its dangers for us in the sense that the Maoist party in power
next door can be a stimulus to and a model for
India
’s Naxalite groups.But the
big difference is that the Nepal Maoists joined the political mainstream
and contested the elections with success, while our own militant
malcontents prefer to carry on their armed struggle against civil society
hoping for a revolution to ripen and sweep them to power.

For
India
the
China
factor looms large, since the Chinese Communist Party is now well placed
to intensify its relations with the CPN (M) and CPN (UML), even as
state-to-state relations between
China
and
Nepal
advance in all fields and Chinese soft power penetrates Nepalese society
and youth.The Chinese will
not disclose any hint of predatory intent regarding
Nepal
, but they do harbour designs to prevent the Nepalese from gravitating
into the Indian orbit via the open Nepal-India border of 1700 km.,
attracted by
India
’s broader economy and liberal polity. They will establish their
outposts offellow-feeling in
Terai as well as upper
Nepal
.They will use the lure of
attractive consumer goods to reach northern parts of
India
as well.

The Chinese also have to keep
vigil on the Tibetans living in
Nepal
, lest the disgruntled refugees, with or without Western collusion, foment
insurgency in
Tibet
when the Dalai Lama passes away.
China
rebooted its
Nepal
policy to adjust to the emerging political realities after 2006; but so
did
India
, quietly dumping its policy of relying on “the twin pillars”, one of
which (the monarchy) had begun to crumble.

Nepal’s discontent with the Indo-Nepal Treaty
of 1950 has a salience in this context.
China
has offered
Nepal
arms before and will offer them again, even for free.The provision of the treaty which bans such military transactions
with other powers will be disputed; if
India
sticks to its retention rigidly, the condition will simply be ignored.
India
’s nuanced and sophisticated policy on
Nepal
since 2006 has anticipated this contingency.
India
has promised to work with
Nepal
on amending or revising the treaty.Prachanda
has come to
India
in mid-September 2008 with a draft treaty.We have some key strengths.The
process is likely to be long and complex, but our negotiators can keep a
steady hold on the vital interests of
India
in
Nepal
without provoking hostile sentiments in
Kathmandu
.
India
has to adjust to the aspirations of the Maoist-nationalist combination in
power in
Nepal
.We have to draw our red
lines with realism and a pragmatic sense of what can be achieved in
current times.The open border
is a related issue where again
India
has advantages not to be overlooked by Nepalese nationalism.

The ethnic diversity of
Nepal
is now more prominently represented in the Constituent Assembly. This is
cause for celebration.But
this variegated representation comes with sharper ethnic divisiveness
between the hill people (paharis) and the Terai dwellers.It accentuates other divisions, especially because the Madhesis are
seen by the paharis and the
Kathmandu
elite as Indo-philes and surrogate Indians.This situation calls for extreme tact and delicacy on the part of
all Indians, particularly Indians in the adjoining Indian states of UP and
Bihar
, to avoid suspicion that we are making common cause with one ethnic group
at the expense of other Nepalese.The
very circumstance of socio-political affinity across the border works
against
India
’s overall interests in developing all-round harmonious relations with
Nepal
.One development which
removes a friction point is that the term “Hindu” in
Nepal
’s official name has been omitted.

Indian security has been affected by
Pakistan
’s clandestine efforts in past years to stir up Terai Muslims as proxy
agents to subvert peace and security on the Indian side and to sow
communal division.A further
complication is the ease with which smugglers can exploit the open border
for criminal activities.Apart
from improving our liaison with
Nepal
’s agencies to thwart such hostile moves involving the ISI of Pakistan,
we should strengthen our own border controls and political overview by
stationing trained officials from the Union government to liaise, advise
and act in concert with the state government officials in the state
capitals and in border check posts.If
the central purview and monitoring of
India
’s sensitive northern border (not only the
Nepal
border) is loose or lax, and the existing federal arrangement inadequate
to tighten it, the necessary changes should be made to correct the
deficiency.

The
US
role in
Nepal
in the period 1990-2008 was wrong-headed.We have to be careful to keep our distance and our counsel before
joining with a major power in demarches of doubtful legitimacy in
Nepal
, although there may be a tactical convergence of interest in particular
cases.

Cooperation between the armed services and
the border security forces on both sides has to be given very high
priority.Here again, there
are gaps in our own coordination and capacity for internal consensus
building.We cannot afford our
army and the civil governmental departments concerned speaking in
different voices.

India is keen to make a joint success of
Prachanda’s first visit to
India
as Prime Minister of Nepal. Both sides have expectations and the
willingness to refashion relations in the new context for peace, stability
and prosperity.
India
is enlightened enough to be more giving, more accommodating to the small
neighbour in its landlocked setting.Economic
cooperation is the tested route to improving relations with the neighbour
countries.The scope is
immense, even with all the projects already finished or in the works.The twin problems of flood control (the Kosi’s depradations in
Bihar
too recent to be forgotten) and hydel power generation may have to wait
until a firmer framework of two-way trust and mutual understanding is
evolved, but should be pressed.

An intellectual investment by
India
concerns our capacity for obtaining and collating information for decision
making for formingpolicies
towards neighbour countries like
Nepal
.While
China
and
Pakistan
are better covered by our researchers, the smaller neighbours are given
scant attention and hardly figure in the media, although they impinge
significantly on our foreign policy and security both episodically and
continually.
India
needs to develop a large pool of
Nepal
specialists who can be called upon to inform and advise the
Union
and State governments from time to time.The specialisation could be farmed out to many educational
institutions, private companies and public sector companies with business
interest or investment in
Nepal
, apart from established government sponsored agencies.Official support could supplement the private efforts of groups
interested in carrying out seminars and studies of this kind.
India
has a long way to go in catching up with the major powers on area studies.